Showing posts sorted by date for query VULTURE. Sort by relevance Show all posts
Showing posts sorted by date for query VULTURE. Sort by relevance Show all posts

Saturday, January 20, 2024

Danakali goes after new project as “vultures” on the prowl

Cecilia Jamasmie | January 19, 2024 | 

Danakali explored the use of filtered seawater at Colluli. 
(Image courtesy of Danakali.)

Danakali (ASX: DNK) warned shareholders on Friday of “predatory activity” by unidentified groups currently approaching investors with “vulture” share purchase offers for their stakes in the company as little as A$0.01 each.


The company, which last year sold its 50% stake in the Colluli potash project in Eritrea to Chinese buyers for $121 million (A$154.7 million), returned nearly 90% of the proceeds to shareholders mid-January.

Danakali now has cash reserves of about A$38 million, or about A$0.11 a share. This means shareholders are being offered less than 10% of the underlying value of their shares, it said.

The Australian miner noted in a separate statement it was already exploring a range of new liquidity options for shareholders. These include an off-market share buyback and further distribution of the firm’s cash reserves in the form of a capital return.

The alternatives are part of Danakali’s efforts to get its shares re-listed on the Australian Stock Exchange. Its latest proposal to resume trading was rejected.

“We believe the extended suspension of our shares puts our shareholders in a difficult position and we will now explore other options to achieve additional liquidity while continuing to engage with the ASX,” executive chairman Seamus Cornelius said in a statement.

“From what we can ascertain, most of the activity has originated offshore and potentially beyond the reach of Australian regulators. Any shareholder who has received such an offer should contact Danakali directly,” he noted.

The Perth-based miner said it had taken the first steps to pursuing a new project in Eritrea by applying to an exploration licence covering 1,537 km². Preliminary work at the property shows the area may be prospective for copper and gold, the company said.

Danakali noted it would report back to shareholders on the outcome of the board’s work and talks in coming weeks.

 

Scientists, farmers and managers work together to avoid the decline of the little bustard, an endangered steppe bird


Generating trust and cooperation among different sectors


Peer-Reviewed Publication

UNIVERSITY OF BARCELONA

Scientists, farmers and managers work together to avoid the decline of the little bustard, an endangered steppe bird 

IMAGE: 

THE STUDY REVEALS HOW BY CHANGING AGRICULTURAL PRACTISES AND GROWING THE FALLOW LAND COULD HELP THE PRESERVATION OF THE POPULATION OF THESE SPECIES, WHICH IS SEVERELY AFFECTED BY HUMAN ACTIVITY.

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CREDIT: FOREST SCIENCE AND TECHNOLOGY CENTER OF CATALONIA (CTFC)





The collaboration between scientists, farmers and managers is crucial to improve the protection of the little bustard, an endangered steppe-land bird in Spain due to human activity. The reduction of natural habitats, the increase in irrigation and the urbanization of the land have led to having less surface areas that guarantee the survival of this vulnerable species. An article published in the journal Biological Conservation reveals how cooperation between different actors is key to finding answers and avoiding the decline of the most threatened populations of the little bustard.

The study, a pioneer example of adaptative conservation, is signed by the experts Santi Mañosa, from the Faculty of Biology and the Biodiversity Research Institute (IRBio) of the University of Barcelona, and Gerard Bota, from the Conservation Biology Group of the Forest Science and Technology Center of Catalonia (CTFC).

An endangered steppe-land bird

For birds such as the little bustard (Tetrax tetrax), it is becoming increasingly hard to find suitable habitats due to the reduction of steppe-land and the disappearance of traditional agriculture and livestock farming. The study states that growing the area of fallow lands — the unsown farmland — helps to stabilize the population of the little bustard in Catalonia.

“This strategy has a positive impact on the little bustard, mainly because it increases the reproductive success, for it provides the species with everything that has disappeared in the rain-fed agricultural environments as a result of the intensification of agricultural practises”, notes Professor Santi Mañosa, from the UB’s Department of Evolutionary Biology, Ecology and Environmental Sciences.

“In spring, — he continues — they find food, places for the males to stop and attract females, mate, nest and feed the baby birds. In summer and autumn, and a great part of the winter, when crops are reaped and cultivated, fallow lands are the only places with enough plants to provide the little bustard flocks shelter and food”.

However, fallow lands have lost interest from a productive and agricultural perspective, and they are in regression in Spain. “Between 2009 and 2018, 21% of the fallow land surface has been lost in Catalonia, according to the latest State of Nature in Catalonia report, published in 2020, and steppe-land bird populations have reduced by 27% between 2002 and 2019, mainly due the loss of fallow lands (as one of the main causes)”, notes expert Gerard Bota. “The little bustard is one of the most affected birds and one of the few species to have suffered a major decline in Catalonia and other areas of Spain in a short period of time. As a result of this situation, it is currently catalogued as an endangered species in Spain, the same level of threat of other emblematic species such as the bearded vulture, the brown bear or the Iberian lynx”.  

What to do besides promoting fallow lands

The population models generated in this study show that increasing the surface area of fallow lands could certainly halt the decline of the species towards its disappearance, “but this measure, albeit essential, is not enough to recover the population numbers, since adult mortality — particularly in females — is still excessive”, warns Santi Mañosa.

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“It will be essential to implement other conservation measures that have not been worked on much to date”, notes Gerard Bota. “For instance, reducing the mortality of adult females, mainly anthropogenic, which is the one we can manage. We know the little bustard is sensitive to death by collision with power lines because of its relatively reduced frontal vision when flying. It would be necessary to identify the main areas of post-breeding and winter aggregation and to act on the power lines installed to reduce the probability of death of the specimens. In the most important breeding and hibernation areas, some lines should be buried or eliminated, and in the rest of the areas, the lines should be properly marked with anti-collision elements”.

Generating trust and cooperation among different sectors

In 2009, a total of eight Special Protection Areas for Birds (SPAs) were declared in the steppe sectors of the Lleida Plain, aiming to protect the most important population of little bustard. Over an area of 47,360 hectares, the land use is regulated so that, in theory, the populations of steppe birds can be maintained. "In these areas, the most important measure that has been carried out so far to favour the populations of little bustards has been to lease and manage up to 3,400 hectares of fallow land, where the little bustards can find refuge and food to breed and spend the winter", says Mañosa.

Building trust and cooperation between different sectors related to land and biodiversity conservation is the cornerstone for finding solutions to ecological challenges in increasingly complex systems.

"Adaptive management is an effective process that managers can use to incorporate uncertainty of outcomes into the management model, learn from their actions and achieve the desired results. A key step in this process is the rigorous monitoring and evaluation of management interventions. For this, the work in the same direction of different actors involved in the implementation — Department of Climate Action and Rural Agenda, public companies, managers and scientists — has been key to the success of the measure", says Bota.

This model of adaptive conservation, "which involves the management of complex socio-ecological systems with the interests of very different groups, is exportable to other scenarios that require the application of actions — with an unknown or uncertain outcome — with the participation of very diverse actors", concludes Mañosa.

 

 

Monday, January 08, 2024

 

Widespread population collapse of African Raptors


Reports and Proceedings

UNIVERSITY OF ST. ANDREWS




An international team of researchers has found that Africa’s birds of prey are facing an extinction crisis.

The report, co-led by researchers from the School of Biology at the University of St Andrews and The Peregrine Fund, and published in the journal Nature Ecology & Evolution (4 January 2024), warns of declines among nearly 90% of 42 species examined, and suggests that more than two-thirds may qualify as globally threatened.

Led by Dr Phil Shaw from St Andrews and Dr Darcy Ogada of The Peregrine Fund,  the study combines counts from road surveys conducted within four African regions at intervals of c. 20–40 years and yields unprecedented insights into patterns of change in the abundance of savanna raptor species.

It shows that large raptor species had experienced significantly steeper declines than smaller species, particularly on unprotected land, where they are more vulnerable to persecution and other human pressures. Overall, raptors had declined more than twice as rapidly outside of National Parks, Reserves and other protected areas than they had within. Worryingly, many species experiencing the steepest declines had suffered a double jeopardy, having also become much more dependent on protected areas over the course of the study.

The study’s authors conclude that unless many of the threats currently facing African raptors are addressed effectively, large, charismatic eagle and vulture species are unlikely to persist over much of the continent’s unprotected land by the latter half of this century.

The study also highlights steep declines among raptors that are currently classified as being of ‘least concern’ in the global Red List of threatened species. They include African endemics such as Wahlberg's Eagle, African Hawk-eagle, Long-crested Eagle, African Harrier-hawk and Brown Snake-eagle, as well as Dark Chanting-goshawk. All of these species have declined at rates suggesting that they may now be globally threatened.

Several other familiar, widespread raptor species are now scarce or absent from unprotected land. They include one of Africa’s most powerful raptors - the Martial Eagle - as well as the highly distinctive Bateleur.

Dr Phil Shaw commented: “Since the 1970s, extensive areas of forest and savanna have been converted into farmland, while other pressures affecting African raptors have likewise intensified. With the human population projected to double in the next 35 years, the need to extend Africa’s protected area network – and mitigate pressures in unprotected areas – is now greater than ever”.

Dr Darcy Ogada added: “Africa is at a crossroads in terms of saving its magnificent birds of prey. In many areas we have watched these species nearly disappear. One of Africa’s most iconic raptors, the Secretarybird, is on the brink of extinction. There’s no single threat imperiling these birds, it’s a combination of many human-caused ones, in other words we are seeing deaths from a thousand cuts”.

Professor Ian Newton OBE FRS, FRSE, a world-leading ornithologist who was not involved in the study, commented: “This is an important paper which draws attention to the massive declines in predatory birds which have occurred across much of Africa during recent decades. This was the continent over which, only 50 years ago, pristine populations of spectacular raptors were evident almost everywhere, bringing excitement and wonder to visitors from many parts of the world. The causes of the declines are many – from rampant habitat destruction to growing use of poisons by farmers and poachers and expanding powerline networks – all ultimately due to expansions in human numbers, livestock grazing and other activities. Let us hope that more research can be done and, more importantly, that these birds can be protected over ever more areas, measures largely dependent on the education and goodwill of local people.”

Raptors of all sizes lead an increasingly perilous existence on Africa’s unprotected land, where suitable habitat, food supplies and breeding sites have been drastically reduced, and persecution from pastoralists, ivory poachers and farmers is now widespread. Other significant threats include unintentional poisoning, electrocution on power poles and collision with powerlines and wind turbines, as well as killing for food and belief-based uses.

The late Dr Jean Marc Thiollay laid the foundation for this study in the 1970s, by initiating a remarkable long-term monitoring effort in West Africa, where the average decline rate was more than twice that of other regions. The Peregrine Fund’s Dr Ralph Buij, who has re-surveyed some of the original areas, noted that: “the human footprint is particularly high throughout West Africa’s savannas, and the near complete disappearance of many raptors outside that region’s relatively small and fragmented protected area network reflects an ecological collapse that is increasingly affecting other parts of the continent. Some raptors that occur mostly in West Africa, such as the little-known Beaudouin’s Snake-eagle, are vanishing into oblivion.”

The study’s findings highlight the importance of strengthening the protection of Africa’s natural habitats and aligns with the Convention on Biological Diversity’s COP15 goal of expanding conservation areas to cover 30% of land by 2030. They also demonstrate the need to restore natural habitats within unprotected areas, reduce the impact of energy infrastructure, improve legislation for species protection, and establish long-term monitoring and evaluation of the conservation status of African raptors. Crucially, there is a pressing need to try to increase public involvement in raptor conservation efforts.

To this end, the study’s authors have developed the African Raptor Leadership Grant to address the immediate need for more research and conservation programs. It supports educational and mentoring opportunities for emerging African scientists, boosting local conservation initiatives and knowledge of raptors across the continent. This initiative, which was launched in 2023, awarded its first grant to Joan Banda, a raptor research student at AP Leventis Ornithological Research Institute in Nigeria, who will be studying threats to African owls.

ENDS

Saturday, November 25, 2023

WORKERS CAPITAL VS VULTURE FUNDS
The £5 trillion ‘pyramid scheme’ threatening to wreck your retirement

Ben Marlow
Fri, 24 November 2023 

Pyramid Scheme

The collapse of Southland Royalty, a private equity-backed oil-and-gas explorer that owned fields in Wyoming’s Green River basin and New Mexico’s San Juan Basin, in early 2020, was unremarkable in many ways.

On the one hand, it was merely the latest shale driller to fall victim to a double-whammy of a near-halving of oil prices from highs of nearly $100 (£80) a barrel in the middle of 2014, together with a four-year low in gas prices.

It faced other headwinds too. Recent drilling results had been disappointing and the company’s banks had cut its borrowing facilities. In a downturn that was sweeping through America’s shale industry, Southland was the 43rd bankruptcy in 12 brutal months.

Yet to others, Southland was more than just another casualty of the boom and bust of the energy sector’s latest gold rush.

As recently as the September before Southland went bust, its owners, an $18bn Houston-based buyout firm called EnCap, had valued its slice of the business at nearly $780m – almost the same amount as it had ploughed into Southland up until that point.

Yet, by the end of the year, EnCap had written down the investment to zero. Weeks later, Southland collapsed – an extraordinary example of value destruction even by the notoriously go-go standards of private equity.

Critics of the industry say the fate of Southland and hundreds of others like it, is indicative of a dangerous mismatch between over-inflated paper valuations of buyout-backed companies and their true worth – a discrepancy that its most fierce detractors insist has become more pronounced as a decade of record low interest rates has come screeching to a halt.

What’s more, they say, it is an imbalance that could have potentially devastating consequences for millions of people’s retirement savings pots as pension funds funnel even greater pools of capital into private equity funds at artificial prices.

“Eventually all these funds filter back to someone’s pension fund,” one City adviser says.

Jeff Hooke, a former investment banker-turned-academic at the Johns Hopkins Carey Business School in Washington DC, describes the way in which private equity values its investments as “the Wild West”.

“Maybe it was okay 15 years ago – you could say it was a niche part of the financial markets, a very narrow part of institutional portfolios, and the regulators could say we have bigger fish to fry. But in some cases, the big state pension plans have 25pc to 30pc of their assets sitting in these alternative investment vehicles.”

Such concerns are increasingly shared by regulators and policymakers. In the UK, the Financial Conduct Authority (FCA) has begun what has been described as “a sweeping review” into valuations of the whole spectrum of private assets from private equity and venture capital, to commercial property and hedge funds.

Its investigation has been prompted by growing fears over the impact of a sharp reversal in interest rates.

Nikhil Rathi, chief of the FCA, which is investigating valuations of private assets - Eddie Mulholland

“The macro economy has moved from a period of low interest rates for a very lengthy period of time, and markets are now expecting . . . higher interest rates for longer,” the watchdog’s chief Nikhil Rathi said last month. “At some point, you might expect that risk will crystallise in valuations of assets.”

His comments were interpreted in some quarters as a warning to auditors that their work with private equity is under the spotlight.

It is understood the Bank of England has given its full backing to the FCA’s interrogation, having warned repeatedly of the risks from stresses in the private equity market, as well as the even more opaque private credit arena.

In its March Financial Stability Report, the Financial Policy Committee (FPC) expressed fears that “illiquidity and infrequent re-pricing of private credit assets created uncertainty…and might expose investors to sharp revaluations and losses”.

Then in July, the FPC cautioned that “riskier corporate borrowing in financial markets – such as private credit and leveraged lending – appeared particularly vulnerable.”

“Signs of stress in the leveraged loan market…due to a worsening macroeconomic outlook, could cause a rapid reassessment of risks by investors, potentially resulting in sharp revaluations and fire sales,” it went on.

The International Organization of Securities Commissions (IOSCO) has similarly warned of “hidden risks” in private markets from the sharp spike in rates.

“When you combine that kind of vulnerability with a lack of transparency, and a changing macro-financial environment, you have a cause for concern,” IOSCO chair Jean-Paul Servais told the Financial Times. Servais is also concerned about market complacency. “There is…a little too much confidence that all will be fine,” he said.

Rock bottom interest rates were a double boon for the private equity industry: the borrowing that underpins its model became cheaper than ever; and institutional investors, seeking higher yields, poured money into buyout firms promising both generous and less volatile returns than the stock market.

Calpers, the biggest public pension fund in America, plans to up its allocation to private equity from 8pc to 13pc of its nearly $450bn of assets under management.

BT’s pension fund, which is among the largest corporate retirement plans in Britain, has sunk a growing proportion of its investments in more illiquid, privately-held assets, as its exposure to equities has rapidly shrunk. It has £1.1bn of £38bn of assets in private equity and a further nearly £9bn in property, credit, and infrastructure.

Even smaller investors have become converts to private equity. The Scott Trust, the owner of The Guardian, allocated nothing to private investments in 2015. Its most recent disclosures show a quarter of its £1.2bn endowment backing buyouts.

As part of reforms unveiled in the Chancellor’s Autumn Statement, managers of the Local Government Pension Scheme (LGPS) have been asked to more than double its allocation to private equity, from less than 5pc to 10pc, to help boost economic growth. The LGPS, which is administered by 86 town hall pension funds, oversees £360bn of assets.

Prior to the pandemic, the high watermark for Wall Street’s buyout barons was the deal boom of 2006 and 2007 that immediately preceded the financial crisis. Fuelled by dirt-cheap and plentiful credit, private equity embarked on an astonishing shopping spree – in many instances teaming up in club deals to go after targets previously considered to be out of reach.

More than a decade and a half later, the ten biggest private equity takeovers in history contain seven from that dizzying period.

Yet, it was nothing compared to the frenzy that was unleashed during the chaos of Covid as stock prices collapsed and central banks slashed interest rates to an all-time low in a desperate attempt to prop up the global economy.

In 2021 alone, more than 1,500 British companies – many of them household names – vanished into private hands including supermarket chain Morrisons, defence supplier Ultra Electronics, and security giant G4S.

Private equity chalked up $1.3tr worth of deals worldwide – shattering the previous high of $670bn set in the year before Lehman Brothers imploded.

Lots were snapped up at bombed out prices and are therefore more likely to have held their value. However, thousands of others bought during more benign times when stock prices were high and debt was both abundant and cheap are likely to be worth significantly less now the music has suddenly stopped.

Yet this isn’t properly reflected in the figures that the industry has reported, Hooke says.

“In 2022, when the US stock market dropped 20pc, the private equity industry said their holdings fell 0pc, which defies rationality. It also defies all financial theory about the value of private assets versus public assets.”

There isn’t a major industry where buyout funds haven’t made inroads. Globally, the private equity industry controls assets worth more than $6tn, according to a McKinsey report published earlier this year.

But it’s the so-called “leveraged buyouts” (LBO), where the balance sheets of the companies that are being bought are loaded with large debts to fund their own takeover, that are most vulnerable to wild swings in value.

In the US, there are around 700 LBO funds, controlling more than 7,000 companies and with roughly $1tr of equity invested. They make up an estimated two thirds of the American private equity market.

It is these that are likely to be the most overvalued, Hooke believes. “In 2008, the American stock market dropped something like 35pc and private equity – principally LBOs – only fell 20pc. That’s just laughable.”

He estimates that in the case of a 31pc fall in the public markets, the value of highly-leveraged private companies should tumble as much as 67pc because of “the magnifying effect of leverage on equity returns”.

The chief concern is that when it comes to valuing the companies they own, private equity is effectively allowed to mark its own homework. A spokesman for the British Private Equity & Venture Capital Association says: “Private capital firms deliver robust valuations to ensure global institutions can invest confidently in the asset class.

“The methodologies and processes underpinning valuations are subject to regulation and annual external audits, follow relevant accounting standards, and are undertaken at a frequency to meet the demands of investors.”

Yet, it is more art than science. Owners are required to hold assets at “fair value” under accounting rules. The practice is known as “mark to market” but is often derided as “mark-to-myth” because mostly, private equity firms decide how to value their investments and when to change those valuations, in contrast with the real-time valuations provided by the stock market.

A paper produced by Hooke and economist Eileen Appelbaum of the Centre for Economic and Policy Research describes these as little more than “guesstimates”.

They point out that unsold companies are illiquid assets, which means their “true value won’t be known until they are sold”. Worse, they are likely to be “optimistically high” because the fund managers that set the prices “have little incentive to reassess their value”.

Private equity houses typically buy a company with the intention of selling it within three to five years. Yet, it is not uncommon at the very biggest funds for as much as half of their investments to still be unsold even after more than a decade.

“The question then becomes, if the fund’s underlying investments are valuable, how come no one wants to buy them after so many years?” Hooke asks.

Appelbaum points to a seemingly never-ending procession of failed stock market floats from private equity owners as further evidence of overzealous valuations. Some have been so disastrous that private equity firms are resorting to buying back companies they only recently took public.

Some major investors are starting to ask questions too. Vincent Mortier, chief investment officer of French fund giant Amundi, with close to €2 trillion of assets, has compared parts of the buyout world to “a pyramid scheme” because of “circular” deals in which companies are sold between private owners at high valuations. “Just because there’s no mark to market doesn’t mean there’s no risk,” Mortier says.

This weekend Mortier told The Telegraph he had not intended to imply fraud.

But he says: “True value is known with certainty only when there are exits through IPO or sale to non-private equity owners.”

His counterpart at the Wellcome Trust, Nick Moakes, recently warned of a “shakeout” in private equity that could result in painful losses for investors who piled into the sector without properly understanding the risks of holding illiquid assets.

Moakes calls it “tourist capital” – people who have invested in assets with “inappropriate risk profiles for them”. With £38bn under management, the Wellcome Trust is one of the world’s largest charitable foundations.

America’s financial policeman is attempting to impose tough new rules on private equity, the property sector and hedge funds. In what would be one of the toughest clampdowns in its history, the US Securities and Exchange Commission (SEC) argues that its reforms, including detailed quarterly performance reports, will provide better protection for investors.

Gary Gensler, boss of America’s financial policeman the SEC, faced a barrage of opposition to financial reforms - Ting Shen/Bloomberg

SEC boss Gary Gensler has expressed concerns about transparency and the potential for financial stability risks but his efforts have run into fierce opposition after a powerful coalition of fund management trade bodies launched a lawsuit to block the rule changes, accusing it of “a vast power grab”.

Hooke says it’s “hard for the man on the street to comprehend” but ultimately any correction ends one of three ways with retirement benefits being cut, taxes going up, or employees having to pay more into their pension to make up the shortfall.

There are fears that a series of increasingly popular tactics are delaying private equity’s “price discovery” moment even further.

The use of “continuation funds” where a fund effectively sells a company to itself has come under particular scrutiny. They mask “an unpleasant truth”, Appelbaum says, by enabling the private equity firms to keep doing deals that shelter their companies from valuations in the public markets.

Mikkel Svenstrup, chief investment officer at the Danish pension giant ATP, has compared the practice to “a pyramid scheme”.

Mortier says: “Marked-to-market valuations are less reliable since these are often based on management forecasts, and the availability of continuation funds to extend the life of an investment asset – all these have the potential to delay the uncovering of problems.”

With the public markets perceived effectively closed for new share issues after a series of disastrous listings, and mergers and acquisitions activity subdued, the tendency will be to hold on to investments even longer.

Yet, in the case of the most financially-stretched companies, that will often depend on whether they can persuade their lenders to give them more time to repay their loans. Restructuring advisers call it “amend and extend” or “kicking the can down the road”.

But as one puts it: “It’s kicking the can down the road with the biggest boot and down the longest road ever. It’s in no one’s interest to fiddle with any of this.”

Friday, October 13, 2023

 

God’s Republics: Two-nation Theory and Two-state Solution


Pakistan failed to develop into a bourgeois nation state, and Israel has no intention of becoming one.
Israel and Pakistan

“This is (also) the story of an army that had a state,” wrote the celebrated Israeli journalist Gideon Levy in Haaretz in July, “Along came a government that acted to overturn the orders of the government in the army’s state, whereas the army rose in protest against the government.”

The script, with some differences, is so familiar to the Pakistani audience that had it not been written by Gideon Levy, it would have been received as a write-up of a Pakistani columnist for whom the horrors of life in a praetorian state outweigh the horrors of death; hence, he has opted to write the last column before committing hara-kiri.

Israel and Pakistan are security states where the critique of the army is taboo. However, those calling a spade a spade are tolerated and sometimes celebrated in Israel if they are white Jews, a privileged species whom even the generals do not dare touch. However, that takes nothing away from the heroic efforts of Ilan Pappé, Israel Finkelstein, Levy, and Amira Hass.

On the other hand, Palestinian journalists are seen condescendingly as lowly creatures. They can be harassed or killed in cold blood without consequences. The gory murder of American-Palestinian journalist Shireen Abu Akleh by an Israeli army sniper is one example.

Pakistan, run by inscrutable decrees of the Praetorian guards, has an altogether different tolerance level. Nonconformist writers, thinkers, and activists disappear into the mist of the night, and sometimes in broad daylight, to be found as mutilated cadavers. “Talk’st thou to me of ‘ifs’? Thou art a traitor—Off with his head,” Shakespeare succinctly sketched in his portrait of an oppressive society quivering in the clutches of peripheral capitalism and native civil-military bourgeoisie.

The ‘invincible’ Pakistan Army had its raw moments when it licked the dust and its wounds, turning it even more vicious at home. The war in East Bengal became its Dien Bien Phu. Humbled, it came to terms with the Bhutto-led civilian leadership. The assassination of Osama bin Laden at Abbottabad by the US Marines came as a rude shock from the ally. The recent momentary grief struck when Imran Khan—the Frankenstein created overnight—found himself on the crest of his popularity, forcing his mentors to concede some transitory space for the civilian leadership. It culminated in extracting a rare apology from the army high command for meddling in politics.

The pledge to remain apolitical was a mirage from the beginning. The dominant institution controlling the means of production is under no compulsion to yield to the demands of the Pakistani people. Unlike the Israeli army, it needs no histrionics of going on strike, for it can strike contemptuously with all its might, not against the enemy but its own people. Leaving the jargon of independence aside, the people of Pakistan replaced the yoke of British colonialism with the fetters of “cantonment colonialism,” a term leading Pakistani economist Qasar Bengali coined.

Despite no formal diplomatic ties, Pakistan and Israel share many similarities. If Pakistan was created based on the Two-nation Theory, the Palestinian land was cleaved to be presented to a mere 6% of the Jewish population to build its homeland under a sham of a two-state solution. If an agnostic Jinnah used the religious card to materialise his dream state, David Ben-Gurion, a self-proclaimed atheist, waved the bible in the United Nations to justify creating a state promised to him by a certain God in whom most of the Zionist lobby scarcely believed.

In 1971, the Two-nation theory had the kiss of death. A new rump Pakistan, a land of the “blessed people”, was born with a new ideology. Cultural Islam gave in to political Islam based on rituals and medieval traditions. Islam, devoid of economic content, became a panacea of all ills. Vulture capitalism, packed in an Islamic facade, was imposed on people.

Since its inception, Zionism has played the “chosen people” card. Gideon Levi said in a recent interview on Red Reality, “Our religion is that what we are allowed to do, no one else is allowed to do, our religion is that we are the chosen people…after the holocaust, Jews have the right to do whatever they want to do.”

Nevertheless, this fixation is common to every faith, whether it is a crusade, jihad, or a pretext for ethnic cleansing of non-Jews.

“You cannot be half-pregnant, even if you like to be, so you cannot be a half-democracy, a democracy for one kind of people only,” Gideon Levi said.

But Pakistan has never been a democracy. Ailing from an aborted form of democracy, lately described as a hybrid experience, Pakistan is run by plutocracy or praetoriocracy. The Israeli democracy is equally farcical, not only for a lack of economic content but for shutting its doors to the millions of Palestinians in occupied territories and within the Israeli state. The recent uprising in Israel—remaining completely indifferent to the Palestinians’ genocide—denotes the dictatorial nature of its democratic facade. The guillotine set forth against the Palestinians has come home to teach a lesson or two to the perpetrators.

If, in the last three-quarters of a century, Pakistan failed to develop into a nation-state—a bourgeois concept or construct—Israel has no intention of becoming one. Countries born from the womb of intolerance, religious bigotry, and racial supremacy cannot absorb and assimilate citizens of different ethnic, religious, and linguistic backgrounds. Pakistan, failing to assimilate ethnicity, created a fictitious identity of a Muslim Ummah, forgetting that Islam is not monolithic and modern Muslim-dominated states follow their own economic interests despite the common religion.

Israel hides behind the tattered veil of racial juggernaut, a hackneyed concept incommensurate to 21st-century capitalism where everyone is a buyer. Although Palestinians have been thrown out of the productive process, they are consumers of the exchange society and almost equal in numbers in what Eretz Yisrael called ‘Greater Israel’. They cannot be wished away.

Besides, nothing can take away from the heroic struggle they launch every day with their blood and tears. They haven’t defeated the enemy, Pappé says, but they have defeated defeatism, which is a great achievement. To cite Mahmoud Darwish, Palestinians have “triumphed over the plan to be expelled from history”.

It adds to the Israelis’ headache that many coloured Jews and non-Jews prepared to embrace Judaism from Africa also live in sundown towns in Israel as second-degree citizens. One can dream of building a white Ashkenazi ‘nation’ in the Middle East, but its materialisation will be the imponderable of history.

Israel and Pakistan were carved out in response to the objective historical needs of imperialism. Not that the Hindu bourgeoisie was indifferent to the Muslims’ socio-economic demands, but it suffered from soft Hindutva, a myopic religious version of hating all communities other than Hindus, ultimately culminating in Modi’s absolutism. The xenophobia of the Indian bourgeoisie gave ample boost to the Muslim petty bourgeoisie and landowning classes to flaunt the flag of a Muslim homeland. Backed by British colonialism, Pakistan became the front-line state against the Soviet Union and its allied progressive powers in the Middle East.

When Bolsheviks were turning the page of history, the Balfour Declaration gave birth to Israel. It was no coincidence. The hegemonic powers watched Marxist theory become contagious with hostility. Churchill declared the “sinister Bolsheviks as international terrorist Jews”. “A Jewish state under the protection of the British crown”, he declared, could thwart Trotsky’s alleged “scheme of a worldwide communistic state under Jewish domination”.

The Bolsheviks exposed the imperialist nature of the Balfour Declaration and the Sykes-Picot agreement.

After inflicting devastating blows on Arab neighbours, the Israeli state has closed its doors to a socialist transformation of Arab republics. The legacy of an iron-fisted control of monarchies in Saudi and Jordan and an authoritarian regime in Egypt can be retraced to the chaos created by the settler-colonial apartheid Israel in cahoots with its imperialist masters. Arabs are beasts, and “Israel is a villa in a jungle”, former Israeli premier Ehud Barak said. But who made the Arabs into beasts? The answer lies in the toxicity of David.

Pakistan and Israel also have dicey relations with neighbours. Pakistan has fought several wars with India, destroyed Afghanistan, and has a far-from-ideal relationship with Iran.

In 1967, without an ultimatum, Israel attacked Egypt, Syria, and Jordan, seizing control over East Jerusalem, the West Bank, Gaza, and the Golan Heights, which it occupies in brazen violation of UN territorial laws. Later, it destroyed Lebanon, only to be humiliated by Hezbollah in 2006. It bombs Syria regularly. The suffering and ethnic cleansing of the Palestinians is no secret.

Pakistan claims to be an Islamic republic, while Israel wants to become a strictly Jewish state. But neither has the Pakistani clergy found the definition of a Muslim, nor is there unanimity in the Israeli ruling class on the definition of a Jew. Pakistan’s innumerable religious sects have no consensus on the Muslim question. In this regard, Justice Munir Commission Report of 1954 is an eye-opener.

After several debates, the Israeli superior court defined Judaism as not religion but racial identity: A Jew can be an atheist unless he changes his religion, even if born to a Jewish mother. It’s quite a contradiction since having a Jewish birth mother makes one a Jew—an integral part of the Jewish race.

In Israel, the holocaust—which had no significance before the 1967 war—is non-negotiable, akin to the immutable facts that are Pakistan’s anti-blasphemy laws, a fetish that cannot be challenged in any court. Both are used as commodities. The Israeli government has directly or indirectly earned $86.8 billion from Germany alone in compensation for Nazi-era genocide.

The charge of anti-Semitism is also being deployed to stifle critiques of its barbaric campaign against the liquidation of Palestinians. Blasphemy is a hot commodity in Pakistan, a means to threaten and lynch one’s enemy or exploit religious minorities for monetary benefit. Like fascism, it is a cross-class phenomenon that can kill with democratic disregard the haves and have-nots, though most of its victims are subaltern and middle-class intellectuals. “The mindless pastime of beating people to death confirms the drab existence to which one merely conforms,” wrote Adorno.

Despite the aura of becoming a technologically advanced country, Israel thrives on American taxpayers’ aid worth $3.8 billion per annum. It sells the world advanced weaponry tested on hapless Palestinians, but like the South African apartheid regime—which possessed nukes—it can only survive on the unconditional support of the United States, whose global outpost it is.

The flight of capital, which has started in Israel after the judicial tussle, is a lethal instrument with the imperialist powers to bludgeon the Global South into submission. “It transpired that the neo-liberal, capitalist system has no reason to invest in the state of Judea [latter-days fascist Israel led by Netanyahu and his far-right clique] if indeed it replaces Fantasy Israel. International financial corporations and the international high-tech industry regard states such as Judea as unstable and risky destinations for foreign investment. In fact, they are already pulling their funds and investments away from Israel,” Pappé wrote in July.

The Pakistani ruling classes made hay during the Afghan jihad under Pakistani Pinochet Zia and Musharaff’s regime when it yielded unconditionally to a single threat from Richard Armitage. Once the Afghan adventures were over, Pakistan lost its geopolitical advantage. The United States left an unemployed army in a country with nukes in the lurch. The nukes have fallen on its people; they are the mutations. Pakistan is a failed state, and, intriguingly, the question of its creation is becoming an existential one.

Amnesty International, B’Tselem, Human Rights Watch, and other human rights organisations declare Israel an apartheid state, a machine that “mows” the Palestinians. It builds the wall, segregates the people, commits infanticide, passes and ruthlessly acts upon racist laws, and builds concentration camps and open-air prisons.

The Pakistan Army massacred its East Pakistani citizens and now perpetrates violent attacks on its Baloch subjects, creates religious auxiliaries to crush movements demanding socio-economic change, snatches land from peasants, and changes governments on whims. Everything is done in the name of securing geographical and religious boundaries. The insinuation and permeation of political Islam, a Mamluk-style tributary mode, in Pakistan, would have been impossible without help from the US-Saudi-Pak Army nexus.

The jihadi culture bred Taliban, al-Qaida, ISIS and other terrorist groups; many fought as proxies of the American empire in Libya, Syria, and African countries. Under American tutelage, Pakistan has regressed into a terrorist-exporting state.

The state terrorism of Israel is an existential reality its ruling class does not even care to conceal. It takes pride in the hideous crimes against Palestinians. The Indian ruling class has learnt many tactics from its Israeli friends, and it may preach pragmatism, “But it is difficult to see,” as Robert Fisk wrote in 2019 in The Independent, “How Zionist nationalism will not leach into Hindu nationalism when Israel is supplying so many weapons to India.”

Hope for these states depends entirely on their people. If they do not wake up to the fetters of the metropolitan capital and their native bourgeoisie, and realise no nation is free that enchains another, there is no hope.

The writer is an Australia-based academic and has authored books on socialism and history. The views are personal.